Spain’s Central Bank Promotes the Digital Euro
Banco de España, the central bank of Spain, is collaborating with its European counterparts to introduce its customers to the possibilities offered by the digital euro, a central bank digital currency (CBDC).
A Forward-Thinking Central Bank
In a demonstrably proactive move, the central bank released a concise document on October 19, illuminating the essence and potential of the European Union’s upcoming central bank digital currency (CBDC).
Advancing Beyond Physical Cash
According to the central bank, conventional physical cash is inadequate in enabling users to explore the benefits arising from an increasingly digitized economy and society. The digital euro is envisioned as a universally accepted mode of payment across the eurozone, akin to traditional banknotes and coins.
Elevating Financial Transactions
As highlighted in the document, the digital euro will play a pivotal role in the financial system, facilitating the seamless integration of electronic payments into our everyday financial dealings. This advancement promises to enhance the efficiency and convenience of financial transactions, marking a significant stride in the broader domain of digital finance.
Building a Strong Foundation
Concurrently, the essential infrastructure underpinning electronic payments, encompassing machines, connections, and protocols, will serve as a cornerstone of our financial system. The Eurosystem, in its role, undertakes measures to guarantee the resilience and availability of this critical foundation.
Digital Euro as a Pillar of European Financial Independence
Significantly, the document envisions the digital euro being established on public and European infrastructure. This strategic decision is poised to strengthen not only the European financial system but also foster greater autonomy from external alternatives, laying the groundwork for financial resilience and self-sufficiency.
Privacy and Usage Modes
The document also alludes to the possibility of the digital euro having two modes: “offline” and “online.” The degree of privacy will hinge on the chosen mode. Offline payments with the digital euro will offer privacy equivalent to cash, while online usage aligns with modern electronic payment practices. Notably, in online transactions, individual user data will remain concealed from the central bank digital currency (CBDC) infrastructure provider, the Eurosystem, and will be exclusively visible to financial institutions.
Preparation Phase for the Digital Euro
The “preparation phase” of the digital euro project, initiated on October 18, is expected to span over two years. This phase will focus on finalizing regulations for the digital currency and selecting potential issuers. However, the ultimate decision regarding the issuance of the pan-European CBDC is yet to be determined.
ECB and European States Promote Financial Convenience
Additionally, the European Central Bank (ECB) has launched a dedicated information page to educate the public about the potential advantages of the digital euro. It promises an “easier life” and a “stronger Europe.” The digital euro is anticipated to offer essential services, including account opening, fund loading, and payments, all in a user-friendly and cost-free manner, seamlessly integrating into the modern financial landscape.
Finland’s Support for the Digital Euro
The Bank of Finland (BOF) is coordinating the development of a Finnish instant payment solution in line with European standards. They also express a positive stance toward the digital euro. A board member, Tuomas Välimäki, describes it as “the most topical project” in the European payment sector.